Question

Is this a progressive, regressive, or proportional tax system? regressive proportional progressive Suppose the government of Lilliput voted to increase taxes on the top earners and decrease it on the lowest earners. How would this new tax system be classified?\

Answer 1

The new tax by the government of Lilliput voted to increase taxes on the top earners and decrease it on the lowest earners is a progressive tax.

Step-by-step explanation:

A progressive tax is one that charges a higher tax rate for people who earn a higher income.

This is predicated upon the fact that people with a lower income will usually spend a greater percentage of their income to survive while the richer can easily afford the basic necessities of life.

Progressive tax systems also have the ability to collect more taxes than regressive taxes, as tax rates are programmed to increase as income climbs. Progressive taxes allow people with the greatest amount of resources to fund a greater portion of the infrastructure such as roads that other petty businesses rely on.

Answer 2

Answer: Progressive tax

Step-by-step explanation:

A progressive tax is a form of tax whereby the tax rate rises as income of the individual or firm increases. Progressive tax progresses from low to high. Progressive tax can be applied to taxes of individuals and are imposed in order to reduce the incidence of tax of people who have a low ability to pay hence, the progressive tax can be used to shift the incidence to those that can afford to pay more.

Progressive tax is is usually used by most countries as it reduces the gap between the rich and the poor thereby curtailing economic inequality. The higher the income in progressive taxation, the higher the percentage paid by the person.